$45 billion of American philanthropic money has been given—but not received.

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When Americans think about donating money to charity around the holidays, they tend to think of the organizations whose names have become practically synonymous with philanthropy: the United Way, the Salvation Army, Feed the Children.

But on a list of the top money-raising charities in the country, the name at number two is one most people have never heard: Fidelity Charitable, the philanthropic arm of the giant Boston-based asset management firm. In 2012, Fidelity Charitable collected $3.6 billion—more than the American Cancer Society, or the Boys and Girls Club, or the American Red Cross.

Like those better-known institutions, Fidelity Charitable generates an immediate tax deduction for its donors. But the resemblance ends there. The fund—actually an aggregation of about 58,000 personal accounts opened by Fidelity’s clients—is one of several massive entities that have sprouted over the past two decades under the auspices of financial services companies like Fidelity, Charles Schwab, Vanguard, and Goldman Sachs. Though legally public charities, they are more like holding tanks that let would-be philanthropists deposit money, collect the tax benefits up front, and then decide later which causes they actually want to give to. Legally, there’s no limit to how long the money can sit there.

Such accounts, known as donor-advised funds, have attracted an ever-larger chunk of American donations since the 1990s. One recent estimate put the total amount of money now sitting in donor-advised funds at $45 billion—more than the endowment of the Bill and Melinda Gates Foundation.

“They’re growing faster than anything else in the nonprofit world,” said Stacy Palmer, editor of The Chronicle of Philanthropy, which compiles the list of top charities. “Astonishing amounts of money are being put into these things.”

With much of America still suffering from the effects of the Great Recession, the sheer amount of money piling up in tax-exempt investment accounts has begun to rankle some experts on charity. Though it is impossible to draw a direct line that shows these accounts are diverting money from working charities, critics point out that while Americans have been giving away the same percentage of their disposable income for decades, these funds have been growing at a rapid clip. According to a report by the National Philanthropic Trust, one of the biggest donor-advised fund programs in the country, donor-advised funds took in a total of $13.7 billion in contributions last year—almost 40 percent more than in 2007—but paid out only $8.6 billion in grants, a difference of just over $5 billion.

“There’s every reason to think that that money would otherwise be going directly to working charities,” said Ray Madoff, a professor at Boston College Law School who has been pressing for more aggressive regulation of donor-advised funds.

The rise of this new form of charitable giving is not a simple story of good vs. greed: By law, all the money in donor-advised funds does ultimately have to go to charity, and proponents say it doesn’t matter when. The funds, they say, may even attract money that might not otherwise be donated and make it possible for people who aren’t wealthy enough to start private foundations to engage in long-term giving. But for critics, it’s part of a worrying shift in philanthropy, away from direct individual giving to investment in huge endowment-style accounts that amass money faster than it is spent, while money managers collect fees along the way. There’s something wrong with a system, they say, in which today’s America pays all the freight—in the form of billions of dollars in tax deductions each year—but the benefits are only a promise to the future.

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Donor-advised funds might sound like a financial novelty, but technically they’ve existed since the 1930s, when they started being offered by community-focused fund-raising organizations.

But such accounts were just a blip on the American philanthropic landscape until the 1990s, when Fidelity introduced its Charitable Gift Fund, opening the door to other commercial money managers to do the same. At firms like Schwab and Vanguard, the new service allowed investors to deposit money into a special giving account, name it after themselves if they wanted to, and then make grants when they felt like it: granting big lump sums when the desire struck them, or dribbling money out over time. Best of all, it made philanthropy into a user-friendly tax planning vehicle for clients: A person who was selling a business in December—and thus facing a steep tax bill at year’s end—could quickly donate a large sum of money and get a tax deduction without having to decide until later what causes to support.

When financial firms started marketing donor-advised funds, the nonprofit world was initially worried. “Charity is being sold as a way to lock up tax breaks and to control your money,” a director of the Humane Society complained to Barron’s in 1998. In the same article, the national development officer for the Salvation Army was quoted as saying that Fidelity’s Gift Fund “sure seems different from the rest of us who work for a cause we ask the public to support.” The Internal Revenue Service was concerned, too, especially when Fidelity’s competitors in the financial services industry started offering similar funds of their own. “No one quite knew...exactly what the full nature of the financial relationship was between the donor advised funds and the financial institutions that created them,” said Marcus Owens, a tax lawyer who at the time served as the director of exempt organizations division at the IRS. “It was a fairly new phenomenon, and the IRS was grappling with basic legal questions about whether [the money deposited into these funds] was a completed gift or not.”

Ultimately no regulatory action was taken until 2006, when a new law introduced some restrictions meant to prevent donors from self-dealing, and started requiring organizations like Fidelity Charitable to disclose how much money, in aggregate, their clients were contributing and giving out every year. Since then, more charitable dollars have stacked up in these accounts with every passing year. In terms of total assets, according to the Urban Institute’s National Center for Charitable Statistics, Fidelity, Schwab, and Vanguard now rank among the nation’s wealthiest 100 nonprofits, a list otherwise populated with richly endowed hospital networks and Ivy League universities

In response to this dizzying growth, a small group of critics, mostly from academia and the nonprofit world, have started pointing out the unintended ways that donor-advised funds are distorting American philanthropy.

One concern is that, even if you agree donor-advised funds are a good thing, having them managed by financial firms changes the landscape of philanthropy significantly. Someone who opens a donor-advised fund at a community-based nonprofit like the Boston Foundation, for instance, can count on getting philanthropic advice from the foundation, which offers its expertise on local needs to help donors disburse their money most usefully. Such foundations also serve as an “open window” to which local nonprofits can appeal in search of funding, said Boston Foundation president Paul Grogan. Programs like Fidelity Charitable, on the other hand, make a point of not endorsing or promoting specific charities. And because the individual account-holders can essentially operate behind a veil of anonymity, nonprofits have no way of getting their message out to a huge swath of potential donors.

“One of the great frustrations for nonprofits is that there’s no transparency regarding donor-advised funds,” said Aaron Dorfman, executive director of the National Committee for Responsive Philanthropy, a watchdog group. “You might see that a grant went from Fidelity to an organization like yours, but you have no idea whose fund at Fidelity recommended that grant, so, you don’t really know who to approach.”

The critics’ more systemic complaint is that the funds undermine the basic bargain of the charitable deduction, one of the biggest tax breaks the US government offers. Essentially, the government forgoes billions of dollars of revenue every year, as long as the money flows into charity. With donor-advised funds, there’s simply no legal requirement that the money flow at all. “They’re getting the same deduction as if they had given the money to a soup kitchen,” said Alan Cantor, a New Hampshire-based consultant who works with nonprofits. “We as taxpayers [should be able to] force them to meet the needs of society by getting the money out, where it’ll do some good.”

Having no payout requirements on donor-advised funds not only bottles up money that society has already subsidized, but creates potential conflicts of interest for the for-profit money managers who invest the money in the accounts. “All of the relevant parties—the sponsoring organizations, the commercial bank they’re related to, and the financial adviser for the donor—are all better off if the money stays in the fund and doesn’t go to a charity,” said Madoff. “If it goes out to the Salvation Army, all those parties lose their fees.”

Another problem is that private foundations, which are required by law to donate at least 5 percent of their assets per year, have started using donor-advised funds as a way to satisfy their payout requirements: According to a report by Giving USA, Fidelity, Schwab, and Vanguard reported that private foundations contributed a total of $92 million to their donor-advised programs in 2011—a significant chunk of which might have otherwise been put to work.

“Eventually all the money has to go to charity—that’s absolutely true and that’s a good thing....But how much do we want funds to just sit there and be warehoused?” says Dorfman.

Madoff has argued that the money deposited in donor-advised funds should be pushed out of the account within seven years, while Cantor suggests donors should be required to pay out 20 percent annually. “I think it’s more important to feed hungry people now...than to put money into an account that may or may not at some point in the future be used to help them,” Cantor said. “That may sound melodramatic, but that’s the choice people are making.”

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For proponents of donor-advised funds—not just the ones overseen by commercial companies, but the hundreds operated by community foundations as well—these arguments in support of more regulation sound academic at best, and disconnected from reality at worst. Even though there’s no payout requirement on individual accounts, they say, the money flows fairly generously.

According to the National Philanthropic Trust, which produces an annual report on the donor-advised fund sector, the national payout rate in 2012 for all American donor-advised funds combined was 16 percent. In a phone interview with Ideas, Fidelity Charitable senior vice president Amy Danforth pointed out that those figures are much higher than what is typical of private foundations, which usually don’t pay out more than the 5 percent that is legally required of them.

“Regulation usually follows a problem,” Danforth said. “And from our vantage point, we simply don’t see a problem with the volume of grant-making out of the donor-advised fund space.”

Danforth said that Fidelity monitors its account activity and considers an account “inactive” if a client hasn’t made a grant for seven years. “Less than 1 percent of our accounts in any given year fall into the inactive donor camp,” she said. Dormant accounts are also rare at the National Philanthropic Trust, according to its president and CEO Eileen Heisman. “There’s some idea that’s been put forth that we’re sitting on all these assets,” said Heisman. But, she added, “We’ve actually given away half our assets in 17 years of being in existence.”

But on a donor-by-donor basis, it’s simply impossible to know whether the money is going to work. The Congressional Research Service pointed out in a report last year that an organization that sponsors a large number of donor-advised funds can achieve a 16 percent payout rate if 20 percent of its accounts pay out an average of 80 percent, while the rest pay out nothing at all. As long as the law allows accounts to sit dormant, or nearly so, that means organizations like the Red Cross and the Salvation Army may be losing out.

When donor-assisted funds were obscure and little used, this didn’t matter as much. But as they claim a growing percentage of America’s charitable dollars, the imbalance of benefits and obligations starts to matter more. It makes sense, critics say, to ensure—even if it’s just a backstop—that the money being donated is being spent on the public good at a time when we need it.

“The charitable deduction is expensive for the federal government....So we need to see, what are we getting for this investment of resources?” said Madoff. “And the problem with donor-advised funds is we don’t know what we’re getting.”